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Rough Cut:France: The Precarious GenerationChanging FranceBy Charlotte BuchenPolitical scientist, Bruno Palier, talks about the foundations of France's welfare state and why it no longer serves the country well.

Excerpts from an Interview With Political Scientist, Bruno Palier. Palier is senior researcher at Sciences Po in Paris, the country's leading institute for political science. In May 2006, he coauthored the book, Changing France: The Politics that Markets Make.

Charlotte Buchen: Can you explain the foundations of the French welfare state?

Bruno Palier: Even though elements were in place before the Second World War, the main departure came after 1945. In 1945, unemployment wasn't really a problem, because we were in a period of labor shortage. The main issue in France as well as in other European countries was to protect the workers. The idea was to integrate the industrial worker within society and the body politic; so they were given social rights, social protections. They were also given political roles in the management of the social insurance system. It was a political project to provide everybody, especially the workers, with social protections.

This means that once you are working, and getting a wage, whatever happens to you, you will always have an income. If you are sick, if you are unemployed, if you are old, if you have an industrial injury, you will have an income from your social insurance. The ideas is that once the worker is protected the whole society is protected. This worked quite well during the 1950s to the early 1970s. But after the 1970s, to big problems arose. One was unemployment and the second was the post-industrial development of our society. The first issue meant that the more unemployment you have, the less protected you are as a society, since all your protections come through work.

Secondly, France, just like in other countries, is now based more on highly skilled engineers and white-collar service-based activities. We are now living in a post-industrial world, and our welfare system is not well-suited to this.

Political Scientist, Bruno Palier.

Why is that?

Not only men but also women work now. The traditional family, if it has not collapsed, is no longer in the majority now. You have more single parents; you have a more diverse make-up of families. And we don't have good social rights for these people. For instance, single women with children need a day care so that they can work and have their children taken care of. The post-industrial economy also means that you will change your job; change your skills; get training. We are good at giving people initial training, but we are not as good at retraining people and updating their skills. The old system is still good at helping the sick, the elderly, some unemployed, those with industrial injuries, but not at providing people with new skills, day care and services. That is the big problem with our welfare system, regarding the evolution of employment.

Why has modernizing the French model proved so difficult?

The problem is that politicians do not trust the French people, so they do not want to explain why they are proposing these reforms. They do not try to involve the French population.

For instance, many reforms are adopted in August and, you know, August is a holiday in France and no one is around. That's a typical example of the way the French elite conceive change. "We have to change without telling the French because they will not be able to accept the change." And you see in the news the French protests. But, actually, if you look at the labor market transformation, the type of capitalism implemented in France, the type of firms that are here, France is also changing a lot, and quite successfully. But the problem is we don't recognize it. And we don't have the political dynamism.

I've lived in the United States and I was really struck by the fact that optimism is part of the political discourse. In France, the political tendency is to do things without the people.

I've lived in the United States and I was really struck by the fact that optimism is part of the political discourse. In France, the political tendency is to do things without the people.

So it's political reform by stealth?

Exactly. Many of the big reforms we are doing, either economic reforms, privatization, welfare and educational reforms, are done by stealth. No negotiation, no announcement, no attempt to convince people and to bring them in.

Do you think that if [French Prime Minister Dominique] deVillepin had worked with unions and other social partners he could have passed the CPE reforms? [The contrat premiere embauche, or CPE, is a controversial labor reform law introduced by de Villepin in 2006 but withdrawn after mass public protests.]

Yeah, I think so because, first, the reform would have been a bit different. The negotiation would have brought some changes. The second reason why I believe "yes" is because Spain just did it, through negotiation. It is very similar to the CPE, but they negotiated over something like one year and they worked it out. And Germany is thinking of doing the same.

It does seem that the debate is always framed in terms of American-style capitalism versus humane capitalism. If you are going to reform the French social model, will it happen along the lines of American model, which is considered savage and brutal by many French?

We live in a very black or white world. It's either good (French) or bad (American). That's the way people think and speak in this country. It shows that they don't know the U.S. that well, because we are very close, actually, in our culture. We are both very arrogant; we both also want to be the hegemon [dominant power]. The thing is, you are the hegemon [referring to the United States], and we were. That's the difference.

There may be a third world. The social democratic world in Sweden, for instance, accepts capitalism but does not acceptance the consequences of it -- the inequalities. So, you have capitalistic behavior, among companies, business, etc, and a huge state that redistributes -- and it works. In France, this is nonexistent. We have a hard time thinking of the market and the state working together.

It's either good (French) or bad (American). That's the way people speak and think in this country. It shows that they don't know the U.S. that well, because we are very close, actually, in our culture.

You mentioned that there have been a lot of changes. Can you talk about the changes that have occurred in the last 10 to 20 years?

The French economy has changed a lot. It was known as a dirigiste economy, so the state decided a lot of things; what kind of investment you do, what kind of mergers between firms -- these kinds of things. All this has vanished. Company decisions are not taken by the state anymore, they are taken by the stakeholders or the CEOs. France has become a internationalized capitalist country, as far as the economy is concerned; much more than Germany Italy or Spain, for instance. You are very close to the openness and the capitalistic machinery of the U.K. or the U.S.

Industrial relations have changed a lot, too. We were living in a [confrontational] country where the unions and the employers used to negotiate at a national level after any big crisis. Now the collective negotiations over working conditions are made at the company level, not at the national level. This means less power for the confederation of the unions, and much more power locally, within the firms, which has weakened the unions.

We were living in a [confrontational] country where the unions and the employers used to negotiate at a national level after any big crisis. Now the collective negotiations are made at the company level... which has weakened the unions.

And education has changed too.

Yes, the education system has changed a lot. It was a very centralized system. Now you see that more educational policies are made again at the local level.

Immigration policies are changing tremendously. We are now speaking about reopening doors, directing help to some. We don't say "community" because we hate the term but actually it's very similar. There has been a big pension reform, healthcare reform. So there have been some changes in the economy and in social and educational policy. Where it hasn't changed so much is the state itself; the fonctionnaire, [public sector worker] and the way you have a career within the state.

The biggest factor is that many changes have occurred but there has been no public discourse about these changes.

Why is there tension between the baby boomers and the young today?
There are less young and more elderly in society now. And the labor market has changed a lot; it's more difficult for the young to find a job than it was before. If we look at the situation since the late 1990s, who are the poor? Not the elderly anymore. They are the young families, and especially young women with children. So the young, the ones who have left their family and are jobless or having difficulty in finding a job; they are the precarious ones.

If we look at the situation since the late 1990s, who are the poor? Not the elderly anymore...They are the young, the ones who have left their family and are jobless or having difficulty in finding a job; they are the precarious ones.

So with there is a generational conflict.

The generational conflict can be seen in terms of cohorts. You have the people who were born before 1935; they had a very tough life. They have known one or two world wars. They have lost a lot of people; they have been working hard; and they didn't live long.

Then you have those people that were born between 1935 and 1955. They were too young to really suffer from the war, they were educated during the 1950s and 1960s when France was booming. They had full employment, they had negative interest rates -- so the bank paid for their house in a way -- they had jobs, they had the power, and now they have good pensions. That's the lucky generation.

And then you have the generation of those born after 1955, who were young when their parents were part of the Sixties Revolution -- which opened up a new world of gender equality, freedoms. But personally, they are living through the age of AIDS and in a society with many difficulties. There are no jobs on the labor market; interest rates are very high. So they are the unlucky ones.

You need to redistribute wealth, but how do you ask people to give something up?

It is very difficult to give up once you have something. But they [the older generation] do give up. If you ask a grandfather or a grandmother, "Do you give money to your grandson or granddaughter at Christmas?" They will say "Yes," because they are in a tough situation. They take care of their very old parents. So personally they do give back. The difficulty is to organize that collectively.

Collectively, when you say, "OK, it's a problem, we will tackle this issue because we've taxed the rich and now we will give the money to the poor, who are the young," the older generation says, "No, we don't want that; we have been working; we deserve our pension, and we will protect our pension." It's really an intergenerational problem. And this is what we are missing now. We don't have the political party, we don't have the elite, we don't have the momentum that would create this collective dynamic where we rewrite the generational contract, where we redress the balance of redistribution.

One thing we haven't really talked about is the young falling outside the system.

It's not falling outside, it's not being able to enter it. The door is not open for them. It is really only some of the young, not all, that are unrepresented -- those who are living in the banlieues [the housing projects, where many immigrant families from North Africa live]; these people are not represented in the national assembly.

Does the death of the French way of life affect you personally, on an emotional level?

No. I'm so close to the new generation, I had to fight for a good position, so I'm not so nostalgic for a period where people had to work like hell in a very industrial job. Just getting coal out of a mine, it was a crazy job. This post-industrial world is full of good opportunities. You can have an interesting job; you can be creative.

But how do you provide the majority with these opportunities and not just the few?

I'm a social democrat, I'm not against the market or capitalism, because I don't know how to do it differently, and I know that you need competition. But I'm against the brutal market. And we can collectively do a lot once we have the market working. I'm hoping that it will gain momentum in France.

So you're optimistic?

You have to be. In my view, there is no reason to live if you're not optimistic.